Chip tester and packager Siliconware Precision Industries Co (SPIL, 矽品精密) yesterday reported worse-than-expected third-quarter results and expected falling gross margin this quarter due to rising depreciation, higher gold prices and appreciation of the New Taiwan dollar.
The Hsinchu-based SPIL also said its capital expenditure, or capex, for this year would be NT$16.4 billion (US$560.1 million), 6.3 percent less than an estimate of NT$17.5 billion made in April.
During the July-to-September quarter, SPIL’s net income was NT$1.699 billion, up 15.6 percent from NT$1.47 million in the second quarter and 15.4 percent higher than NT$1.471 billion in the corresponding period last year, the company’s financial report showed.
However, that was lower than Credit Suisse’s forecast of NT$1.8 billion in net income for last quarter.
The company’s earnings per share were NT$0.55 in the third quarter, compared with NT$0.48 in the previous quarter and NT$0.47 the year before, the report showed.
The company’s downward revision of its capex reflects weakening demand from chip companies and an ongoing inventory adjustment at downstream vendors, but the figure is still 49.1 percent higher than last year’s NT$11 billion.
“Because of softening demand for information products and consumer electronics, despite a still-strong demand for communications products, we are conservative about the fourth-quarter outlook,” local cable TV network UBN yesterday quoted SPIL chairman Bough Lin (林文伯) as saying at an investors' conference in Taipei.
"But following the inventory adjustment in the second half this year and the sales of Windows 8 products in this quarter, we expect a recovery in the PC industry in the first quarter next year,” Lin said.
While the negative macroeconomic condition has affected the semiconductor industry this year, Lin said the chip packaging and testing sector would fare better than wafer foundry sector next year due to rising demand of communications products.
For this quarter, SPIL expects revenue to stay flat or drop by 3 percent from the third quarter, Lin told investors.
In addition, the firm expects gross margin to drop to a range of between 17.5 percent and 18.5 percent for this quarter, from 19.7 percent in the third quarter, while operating margin may fall to between 9 percent and 10 percent, from 11.3 percent, he said.
Next year, the firm plans to maintain a capex of approximately NT$11 billion and will mainly focus on wafer bumping and flip-chip packaging equipment, he added.
SPIL is the world’s second-largest chip packager and tester after the Greater Kaohsiung-based Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), which on Friday reported an 8 percent sequential increase in net income for last quarter to NT$3.45 billion, or NT$0.45 per share.
SPIL’s consolidated revenue for the third quarter was NT$16.85 billion, representing 1.8 percent growth from the previous quarter and a 3.2 percent increase from a year ago.
The company’s gross margin of 19.7 percent in the third quarter was lower than its guidance of between 20 percent and 22 percent made in August, and compared with the 20.2 percent forecast by Credit Suisse.
SPIL’s operating margin of 11.3 percent in the third quarter also fell short of its previous guidance of between 12 percent and 14 percent, and compared with Credit Suisse’s forecast of 12.3 percent.
For this quarter, Lin said the company’s utilization rate would remain at 100 percent for wire-bonding packaging from last quarter. The utilization rate for IC logic testing equipment is also likely to stay put at 80 percent this quarter from the previous quarter, but that for flip-chip ball-grid-array packaging is forecast to fall to 85 percent this quarter from 95 percent last quarter, he said.
In the first three quarters, SPIL reported a net income of NT$4.06 billion, up 10.7 percent year-on-year, and revenue totaled NT$48.51 billion, up 6.5 percent year-on-year. Earnings per share reached NT$1.31 in this period, up from NT$1.17 last year.
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